Who are considered internal users of financial statements?

Internal users of financial statements are those individuals or groups within an organization who rely on the financial information for decision-making and operational purposes. Management is a prime example of internal users. They utilize financial statements to evaluate the performance of the company, make strategic decisions, assess resource allocation, and plan for the future.

In contrast, external users, such as investors, creditors, and labor unions, typically look at financial statements to assess the financial health of the organization from an outside perspective. They are interested in profitability, solvency, and the overall financial stability of the firm, but they do not engage directly in the day-to-day decision-making processes within the organization as management does.

Thus, management, as internal users, directly applies financial data to drive operational strategies and achieve the organization's goals.